8 April 2004

Ruckus over resale royalty

With pressure mounting for the introduction of a resale royalty on works of art every time they change hands, auction houses are becoming anxious, writes Michael Hutak.

Fine art worth more than $91m changed hands in Australia's booming auction market last year, yet the artists responsible for those works (or their heirs) saw not a red cent of it. One auction house, Sotheby's, shifted $7.9m of Aboriginal art at one sale last June. Yet living conditions on many of the remote desert communities where the finest indigenous artworks originate remain a national disgrace.

Media attention on anomalies such as the late Johnny Warangkula Tjupurrula – one of the originators of the dot-painting phenomenon who spent his final years in abject penury while works he had sold for $30 went for hundreds of thousands in the saleroom – has accelerated calls for a resale royalty to be introduced in Australia.

Such a royalty, also known as a droite de suite after the French scheme that has been in place since the 1920s, is a fee – typically fixed at about 5% of the hammer price – that goes to the artist every time an artwork changes hands in the secondary market. Support for such a scheme gained momentum in 2002 when Rupert Myer made a resale royalty a key recommendation in his federal government inquiry into visual arts and crafts funding.

However, the prospect of a new tax on collectors has the secondary art market in a lather as it collectively points towards a fast-falling chunk of sky.

"It's been highly unsuccessful in France," says Paul Sumner, chief executive of Sydney auction house Lawson-Menzies. "And it hasn't actually reduced the gap between rich and poor artists – it just rewards artists who are already successful."

Sumner, who has just an-nounced that his firm will take on market leader Sotheby's for a slice of the lucrative Aboriginal market, says Lawson-Menzies will pay 2% of its normal commission on sales of indigenous works into a new foundation that will donate funds to improve health and living conditions in Aboriginal communities.

The foundation hopes to raise $200,000 in the first year. However, Sumner acknowledges the impetus for setting it up is to derail the resale royalty juggernaut. "We're trying to head it off," he said. "We think it will be a nightmare to administer and ultimately will only hurt the artists."

But citing a 2003 Australia Council study, which found that 50% of Australia's artists earn less that $7500 a year from their art, Labor arts spokeswoman Senator Kate Lundy argues that artists couldn't be hurting much more than they are now.

The creation of a decent ongoing income stream for artists "is way overdue and it's Labor Party policy to introduce a resale royalty", she says. Lundy, who introduced a private member's bill on the issue in the Senate on March 11, concedes it has no chance of passing without government support. However, she says she's "calling the government's bluff on this. There's simply no excuse for them to delay their response to Myer any longer."

Last September, a year after Myer reported, then-Arts Minister Richard Alston promised a response on resale royalties before the end of the year. Six months later, his replacement, Daryl Williams, who also retires at the next election, is backing away from the idea.

"The government will only commit taxpayers' money to developing an implementation strategy if it is satisfied that we should implement a resale royalty scheme," a spokesman says. In other words, it's not satisfied.

Labor's draft bill is modelled on European Union legislation, where a droite de suite will extend to member countries from 2006. Lundy was advised by the National Association for the Visual Arts, the Australian Copyright Council and Arts Law, which have urged the government to act on Myer's recommendation and implement the scheme.

"We need a decision," NAVA executive director Tamara Winikoff says. "This issue has been kicking around for 20 years and it should be a bipartisan issue. We're very pleased that Labor has committed itself to a bill, and we urge the government to support it."

Not everyone in the trade is contrary. Sotheby's Tim Klingender has gone on record several times in favour of a droite de suite. "I think it would be great if it could be made workable," he says. And leading Melbourne Aboriginal art dealer Gabrielle Pizzi believes a resale royalty is "an inevitability".

But she warns: "Some people will have to be dragged kicking and screaming to it."

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First published in The Bulletin

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